UNCITRAL MODEL LAW

INTRODUCTION

The United Nations Commission on International Trade Law has adopted the Model Law on commercial arbitration internationally. It is constituted for the improvement of national laws. In the year the 1960s, when world trade was started expanding, that was the time when UNCITRAL was established. It was created to harmonize and unify the national and international law of trade and commerce. It has all stages required or mentioned in the arbitration agreement. In the beginning, there were 29 states as the member, but later it expands to 36 and then 60, after considering the advice and suggestions from the members as its basis of work program nine subjects were adopted.

Background

On 21st June 1985, at the Commission's 18th annual session, UNCITRAL Model Law on International Commercial Arbitration was adopted. Earlier, when international trading was started, there were no formal agreements, and in the year 1960s, when the trading started expanding the need for having good law for international trading and to maintain the standard for harmonization and unification of national and international laws, UNCITRAL was introduced.

In the beginning, the UNCITRAL had 29 states as a member, but later, it expanded to 36 members, and in the year 2002, 60 states became its member. After taking all the suggestions provided by the member, nine subjects were finalized for its work program, which includes:-

1. International Commercial Arbitration.
2. Insurance.
3. International payments.
4. International Sale of Goods.
5. Transportation.
6. Intellectual property.
7. The elimination of discrimination in laws affecting international trade.
8. Agency.
9. The legalization of documents

Purpose

The main reasons for formulation and adaptations of UNCITRAL law were to provide harmonization, modernization, and unification of International Trade and Commerce by establishing or making:

1. Legal rules and texts.
2. Model law.
3. Contractual rules.
4. Legal guides.
5. Recommendations.
6. Enactments of uniform commercial law.
7. Technical assistance

Principles of International Commercial Arbitration

The parties are permitted to decide the rule of law for the material and merit of the dispute, and this permission is given by the Model Law so that the parties do not have to choose any specific domestic or national law. The model law is not made against any particular State's legal system; it is created or established for the unification of law.

To ensure that the arbitration proceedings go smoothly, UNCITRAL model law makes all the related and necessary provisions. UNCITRAL Mode law has four main principles to govern International Commercial Arbitration; the principles are as follows:

1. Party Autonomy:

Part Autonomy is the 1st basic principle of UNCITRAL Model Law. Arbitration helps the party to choose the process which will help them keep their matter resolve. In domestic cases or national or local State cases, the method or the rule of law to solve the dispute is not a big problem. Still, when it comes to international trade or commerce, the main question that arises is the jurisdiction, and UNCITRAL Model Law solves this problem; it gives neutral and fair hearing.

The Model Law allows the parties to choose the rule and laws for the substance of international arbitration:

1. Article 2(d) of the UNCITRAL Model Law confers that the parties have the right to select the rules and institutionalized arbitration.
2. Article 3(1) of the UNCITRAL Model Law confers that the parties have the right to decide the manner of the written communication, which is deemed to have been received.
3. Article 10(1) of the UNCITRAL Model Law gives the right to the parties to decide the number of arbitrators.
4. Article 11(2) of UNCITRAL Model Law gives the right to the parties to determine the procedure for the appointment of the arbitrators.
5. Article 13(1) of UNCITRAL Model Law gives the right to the parties to agree on the system to challenge the arbitrator.
6. Article 21 of the UNCITRAL Model Law gives the right to the parties to decide the process of how the arbitration proceedings will be conducted.
7. Article 22(1) of the UNCITRAL Model Law gives the right to the parties to determine the language of the arbitral proceedings.
8. Article 23(1) of UNCITRAL Model Law gives the right to the parties to agree on the manner and time decided by the arbitral tribunal to support the claim.
9. Article 24(1) of the UNCITRAL Model Law provides that the parties have the right to agree to oral arguments.
10. Report 25 of the UNCITRAL Model Law provides that the arbitration tribunal shall take the decision regarding the proceeding if the party fails to provide sufficient cause for their claim unless the party has agreed to it.
11. Article 26 of UNCITRAL Model Law provides that the arbitral tribunal may appoint the expert unless the party has agreed to it.
12. Report 28(1) of UNCITRAL Model Law provides that the parties have the right to choose the law which will be applicable in the subject matter of the dispute.
13. Article 28(3) of UNCITRAL Model Law provides that the parties have the right to authorize to decide ex aequoet bono or as amiable compositeur by the arbitration tribunal

Separability

One of the main principles of the arbitration agreement is that it never "dies." The arbitration clause mentioned in the main contract is called an arbitration agreement, and even being in the main contract, it is independent and makes it separate from the rest. If, for some reason, the main contract becomes void, invalid, or terminate in that case, also the arbitration clause or the arbitration agreement will not die. This feature of not dying is called the principle of separability.

1. Competence-Competence:

The principle of competence-competence under UNCITRAL Model Law basically means competence to determine someone else's competence. The arbitral tribunal is competent to control its own jurisdiction and to decide its area, which falls under its jurisdiction. Therefore if any case comes in front of the tribunal, then the tribunal has the right to decide on the matter.

In the case of Konkan Railway Corporation Ltd. And Anr v. Rani Construction Pvt. Ltd.:

In this case, the court held that if the parties do not file the application for arbitration under sections 8 and 11 of the Act, then, in that case, the arbitration tribunal is competent to take a decision on its own jurisdiction. The arbitral tribunal is competent to decide the matter, but it does not give the authority to ignore the finality given prior to the application filed. That means the arbitrator cannot be the sole judge but the first judge of its own jurisdiction. This case is mainly pointing out the power of the arbitral tribunal to decide on its own jurisdiction.

1. Territorial Principle and Enforceability:

Article 1(2) of the UNCITRAL Model Law states that it only applies if the place of the arbitration is within the territory of the State.

The UNCITRAL Law is created to solve the issue of jurisdiction between the two or more States for international commercial arbitration and to maintain the harmonization and unification of the law. But the basis of this principle is to make sure that the law is enforceable in all countries.